Editor’s note: Under the leadership of Xavier du Boÿs, Kiloutou has tripled in size over the last 12 years to become France’s second-largest equipment rental company with 2012 revenue of €460 million (US$513 million). While the company’s name does not have a direct translation into other languages, to those in France, du Boÿs says it simply means, “Who rents everything,” which is exactly what Kiloutou does, offering everything from construction equipment and tools to tents, linens and more. When he was young, du Boÿs says he raced motorbikes and continues to have a love for tennis and skiing when and if he has spare time. He earned his Masters in Business Administration degree from Essec, one of the top business schools in France, and continues his management training each month with a group of 20 managers from different fields. “None are in the equipment rental industry, but you can learn from them as we meet with experts and discuss things,” he says. The company has 3,300 employees and earlier this year, Kiloutou brought 226 of its best people as a reward to Las Vegas for The Rental Show 2013, where du Boÿs discussed his management style, the success of Kiloutou and his outlook for the future with Rental Management. An edited version of that conversation follows.
RM: Why did you decide to bring 226 managers to The Rental Show 2013 in Las Vegas and what did you hope to gain from the experience?
Xavier du Boÿs: The company once sent a few managers to New York 15 years ago and then we spoke about when we do it the next time, it would be to Las Vegas for The Rental Show. To do this, we had to have a very profitable year, but soon after there was a crisis in France and Europe. I began managing Kiloutou 12 years ago and promised that if we were very successful, we would go to The Rental Show in Las Vegas. In 2011, our results were very good, even if the overall economy was not doing that well. We had a significant increase in market share and had made two big acquisitions that were changing the company. That’s when we decided it was time to come to The Rental Show and bring 226 of our best staff members, but each one had to earn a seat to come to Las Vegas. We arranged many different challenges during the year and the best ones earned a spot to come. It means the people who traveled to Las Vegas were not at the most senior level. Some of them were, but not all, because we brought those who were the best in their field. This was a kind of reward for performance, but also an opportunity for them to see the show and what is happening in America in the equipment rental industry. America has a more advanced and mature rental market than France. They were able to see good ideas to bring back to France, so we also expect a return on our investment.
RM: You have been the head of Kiloutou for nearly a dozen years. How have you seen the equipment rental industry change in France over this last decade and how has Kiloutou responded to those changes?
Du Boÿs: Kiloutou is among the rental companies that are changing the market. The market in France is changing because it is not mature. In the 1990s, renting was just renting a piece of equipment. During the 2000s, we introduced new services and we even changed our logo. Now we are renting equipment and providing services. We wanted to add the word “service,” which is very important. During this current decade, we will move forward to offer more services, moving in the direction of being a partner of the client. To work in partnership with clients is how it will be in the 2020s. That’s what we have to create, invent and put in place. At the end of the economic crisis in 2009, we launched a company effort to create a vision of what Kiloutou will be in 2020. This was not my work as CEO or work done by a management committee, but a committee of senior managers from all of the regions and all executives, including 200 people who worked on this project. There will be changes, new generations, new technology, new equipment, new relationships with clients and new ways of constructing buildings. When you put that together, you have to look at what the risks are, make those risks opportunities and define what we want Kiloutou to be in 2020. We wrote down the mission and it is our guideline. The name of the project is “Yes!” and we do everything to make things simple for the client and make what is impossible possible. We want to invent new ways of renting and developing the French market. As a leader, if we do it correctly, we will change the market and customers will see that they can expect new services and a new way of renting equipment.
RM: Most people are under the impression that the European rental market is more mature with greater penetration and acceptance of the rental concept, but you’re saying the American market is more mature with offering services?
Du Boÿs: I do not know the American market, but I know some markets in Europe and the French market. In France, rental penetration can be increased by a lot. The penetration rate for access equipment is high, but there are not that many users of access equipment. Growth will come through more users. Tool penetration is low. The future is in front of us. To expand and create this market, we need a strong and convincing offer. Then the demand will follow.
RM: Everyone has been dealing with a difficult economy since 2009, yet Kiloutou has been growing. What’s your secret?
Du Boÿs: We do our best and work hard to be the best. The company’s objective is to be the best rental company in France. We have four visions. The first concerns the Kiloutou way of doing business with the largest customer base and the largest range of machines. The second is the vision of growth to expand equally. The third vision is to have the best quality. Customers want the best service, so we try and improve quality as much as we can. The fourth is human vision as a way of increasing business. The result is an increasing market share every year. When I came to the company 12 years ago, Kiloutou’s share was 6 percent. Today, we are at 12.5 percent.
RM: How large is the company?
Du Boÿs: We have more than 400 branches in France, almost everywhere. We have a bigger market share in large towns and smaller in local areas. We have 3,300 people and the revenue last year was €460 million (US$513 million), which put us in second place in France. We are the fourth largest equipment rental company in Europe. We were the tenth largest rental company three years ago.
RM: Who do you consider to be competitors?
Du Boÿs: In France, it is Loxam. They were twice as large as Kiloutou before, but now they are 1.4 times our size with revenue of €715 million (US$916.6 million) in France. However, again, our objective is not to be the biggest company. I want Kiloutou to be the best. That’s why we were proud when we were named the “Best Rental Company in Europe” last year at the European Rental Association (ERA) meeting. The award recognized the work done by our people.
RM: Kiloutou also has made several acquisitions to grow the company. In today’s economy how do you finance acquisitions?
Du Boÿs: We have a good financial structure and we have been able to finance growth with loans and profit. We also have two private equity funds invested in Kiloutou ready to put more in if there is a good project to create value. Up to now, that has not been necessary.
RM: How do you define a successful year for Kiloutou? Do you just look at profit or are there other things to consider?
Du Boÿs: A good year for Kiloutou is one where we have reached our objectives in terms of revenue and profits, and where we have increased our market share and prepared for the future. This may seem general, but this also is about the “Yes!” project and our vision for the future. When we make an acquisition, it takes investment and effort before it becomes profitable, but we have to make acquisitions profitable. Success also includes the well-being of the staff, which is very important.
RM: What are your key concerns for the business today? As the head of Kiloutou, what keeps you up at night?
Du Boÿs: I am more concerned about the dynamics of the French economy, which is not so good. Contraction is expected for one or two years. I am very confident that our company will grow in the long term. My concern could be that we’re growing very fast and the question is whether we are growing too fast. We need talented people to provide services and my concern is getting the best people, so that we have the talent available for the growth we are experiencing.
RM: In the United States, the equipment rental industry isn’t always considered to be a career opportunity and it is hard for rental companies to find good employees. You have 3,300 employees. Is it easier to find employees in France?
Du Boÿs: It’s definitely the same in France as the United States. The rental industry is not a well-known sector. It’s a fantastic sector and a fascinating business because everything needs to be invented. People don’t know renting exists, but when they know about it, they love it. This is one of the few jobs where you can continue learning new things even after 20 years of experience. There will be new situations you have not had before. We have plenty of staff members with more than 20 years with Kiloutou and they learn every day. Growth opportunities also are important to provide for people in a career. We like to offer employees the chance to make new things, make more money and have more responsibility. There are some employees in Kiloutou who are young and can take on responsibility because they are good. This is recognized at Kiloutou. In France, having a diploma is important, but at Kiloutou, it
just matters if you are good.
RM: I was surprised to see Kiloutou also has an “Events and Receptions” category on the company’s website.
Du Boÿs: We have the largest customer base and the largest range of machines and equipment. It is important for us, because we can have many machines that can be of interest for a client and we have many clients to efficiently operate a machine. This kind of metrics is important. If you increase the range of products you offer, you increase the range of customers. We have some event and party, as well as access and earthmoving equipment, and all kinds of tools.
RM: In the U.S., many general rental companies will do more in party and event because that’s where the customers are. I haven’t heard of that many rental companies in Europe also offering party and event rentals. What percentage of your revenue comes from this segment?
Du Boÿs: It is very marginal, but growing and profitable. You will find smaller rental companies in Europe sometimes also offer this type of equipment. A significant number of companies don’t, but at Kiloutou we do. We designed our offer as far as the event is concerned and it is going well.
RM: Is there anything in particular you would say is the company’s greatest accomplishment so far?
Du Boÿs: I am proud of everything we have done with the people at the company, giving them the power to decide about Kiloutou’s future with the “Yes!” project. It means that we have designed Kiloutou of the year 2020 together. We shared this vision with the management committee, 200 regional executives and 700 middle-management staff members. We asked all employees, “What is your vision?” There were plenty of ideas. With so many people thinking about what they want to do, they have ideas that they share and then they agree with the given vision. You don’t have to convince them because they want to do it. They are part of it and make it work. If they spend the energy on the ideas, then they want to promote it. With this way of working, we are moving forward very quickly. That’s something I’m quite proud of.